The Ministry of Economic Affairs yesterday downplayed the potential adverse impact of the cross-strait service trade agreement, while academics and industry representatives called on the government to conduct a thorough reassessment to ensure Taiwanese service providers’ rights are safeguarded.
“International trade agreements are signed on the condition that there is always give and take from the countries at the negotiating table,” Vice Minister of Economic Affairs Bill Cho (卓士昭) said at forum in Taipei. “While Taiwan is facing difficulties in fostering GDP growth, lowering barriers to international trade is absolutely necessary for the country.”
Cho said the goal of the cross-strait service trade agreement is to help local service providers explore new markets. He also said the Taiwanese service sector as a whole could gain more than it loses from the deal.
General Chamber of Commerce chairman Lawrence Chang (張平沼) told the forum that Taiwanese service providers should take advantage of the opportunities offered by the trade agreement and that they need to think positively that “competition pushes firms to make headway.”
Jan Hung-tze (詹宏志), chairman of online shopping Web site PChome Online Inc (網絡家庭), on Tuesday said the trade agreement “opened a small window” for Taiwan’s e-commerce sector, because it allows Taiwanese firms to establish branches in Fujian Province, China, but that he was not satisfied because Taiwanese service providers still face barriers to entering the Chinese market, despite the pact.
Cho said the market value of the Taiwanese service sector accounts for almost 70 percent of the nation’s GDP, while in China it makes up about 45 percent of GDP, stressing that “there is huge growth potential in China’s service sector” which should encourage Taiwanese firms to explore Chinese markets.
To lessen concerns that increased Chinese investment would take away job opportunities for Taiwanese, Cho said the ministry has adopted strict standards when evaluating applications for Chinese investment in Taiwan under the Economic Cooperation Framework Agreement (ECFA), adding that the government has only granted 216 Chinese requests from a total of 398 applications received by the end of last month.
Cho did not release data on how many Taiwanese firms had invested in China and created job opportunities for Chinese under the ECFA, which is also one of the public’s concern over cross-strait trade agreements.
National Taiwan University economics professor Kenneth Lin (林向愷) told the Taipei Times by telephone that the service trade agreement’s economic advantages had been overestimated by the government.
“The pact will bring a great number of cultural impacts,” Lin said. “Services are untradeable in theory and therefore it’s better to leave them in their original form so that those that have distinct Taiwanese features can be preserved.”
From a cultural perspective, once the door is opened to Chinese investment in all of Taiwan’s service sector, the impact would be huge, Lin said.
He added that because Taiwanese and Chinese, though they use the same language, have different lifestyles the agreement would do little to invigorate the domestic market, where only Taiwanese vendors know what local buyers want.
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